Unconscious Bias: What is it?

There are more than 2,300 Indigenous businesses registered or certified on the Supply Nation database. For every dollar of revenue, these businesses typically generate $4.41 of social return – which represents significant value. These are businesses that are aspiring to grow, offer quality goods and services, and achieve success – but they are also facing unique challenges and barriers.

One of the most significant challenges faced by Indigenous business is unconscious bias.

What does this mean?

Bias is ‘inclination or prejudice for or against one person or group especially in a way considered to be unfair’ (Oxford Dictionary).

Unconscious bias usually occurs where you act with bias towards a person or group, unaware or unknowingly. Indigenous businesses often experience prejudice in the form of:

• Questioning the legitimacy of an Indigenous business owner’s identity
• Questioning an Indigenous business owner’s capability, skills and knowledge

We hear all too often, “they wouldn’t be able to do it, because they are an Indigenous business.” Unconscious bias assumes that a specific set of characteristics (eg culture, ethnicity, sexuality, gender) are relevant to the skills and capabilities of a person when – to put it succinctly - they are not.

​The only way to overcome unconscious bias is to bring these assumptions out into the light and scrutinise them.

Here’s a quick look at some common myths, as outlined in Supplier Diversity How by Kristal Kinsela (2019).

IPS Director Jahna Cedar and IPS consultants Joanne Hill and Katie Clarke

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Myth: Indigenous businesses are not capable​

False – Most Indigenous businesses provide quality goods or services. Not all businesses are in the same sector or industry, and therefore will demonstrate a broad range of capabilities within their own market. 

Myth: Having non-Indigenous staff makes the business less Indigenous

​False – Any business should make employment decisions based on the best fit for the business. Indigenous people represent less than three per cent of the total population of Australia, meaning it is very competitive to recruit Indigenous talent. The focus on legitimatising an Indigenous business should be on the ownership, management and control of the business, where a majority (51% or more) sits with Indigenous people.

Myth: Indigenous businesses can't scale up​

False – any Indigenous business can scale up if they have the right opportunity to do so. Scaling up might look different, depending on the business, sector and circumstances. Access to capital or a genuine JV could help an Indigenous business scale.

Myth: Indigenous businesses are only small businesses​

False – Whilst there a majority of small businesses, there are many medium to large enterprises growing through IPP contracts.

Myth: Indigenous businesses can't manage their cashflow​

False – Cashflow is challenging for all businesses, but particularly small business. The challenges experienced by Indigenous businesses are the same as any other business. Working with government and corporate can be challenging, due to a wide variety of different payment terms. For example, a company that takes 30-45 days to pay has the potential to have a major impact on their contractors.

Myth: Indigenous businesses lack business acumen​

False – All small businesses face similar challenges delivering on a product or service while being a small entity and having to run the business operations at the same time. There are varying and diverse levels of business acumen depending on the size, type and industry. 

Myth: Indigenous businesses only make and sell art​

False – We have lawyers, facilities maintenance, construction, consultants, florists, stationary providers and IT companies to name just a few.

Myth: Indigenous businesses will cost you more

​False – Indigenous businesses will price their products and services just like any other business. In some instances you might pay more for a higher quality product. But in lots of instances it is actually Indigenous businesses who are pushed to be price competitive and reduce their costs to compete – which can in turn make the pricing unsustainable.

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​​You can help to alleviate the barriers faced by Indigenous businesses and Indigenous business people by making changes internally to address the challenges and barriers, and supporting supplier development opportunities.

Delivering unconscious bias training across your organisation is a great way to kickstart this process. This training will help your team to gain a deeper understanding of bias, conscious or unconscious, and of how personal and professional beliefs impact unconscious bias. It will build an understanding of the value and benefits of diversity.

​These open discussions with your teams about the challenges and barriers facing Indigenous businesses are the best way to address unconscious bias, whilst helping your business to create strategies to mitigate those barriers and increase your engagement with Indigenous businesses.

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​If you would like to talk to IPS about delivering unconscious bias workshops in your business, please don’t hesitate to contact us.